Game analyst Michael Pachter isn't a fan of the free-to-play business model.
"Before 2000, it was a simple life. If people wanted your content, they paid for it," he said in his Develop Brighton talk.
This also made the business more predictable for developers and publishers and everyone understood the rules.
"If your game wasn't predicted to sell five times its costs, it wouldn't be made. Everyone knew that," he said of the boxed product world.
Bad times?
But 2008 was the last growth year for the packaged goods sector. Meanwhile the cost of making games has continued to rise.
Pachter argued another big change in the industry was the rise of multiplayer gaming, especially on consoles with games such as Halo
Now 25 million uniques are playing Call of Duty every month. That's 20-30 percent of all console owners.
Combined with the rise of smartphones and social gaming, this has radically changed the games business.
"Tablets are so positive for mobile gaming,. Mobile games will keep getting bigger. Social games will continue to be big," he said.
NintEnd...o
He also argued that the rise of mobile and social games helped kill off the Wii.
This was combined with the way Nintendo has handled the business. Pachter said the company lost the plot when it gave up on hardcore gamers and took too long to release a follow up to the Wii.
"Nintendo needs games such as Call of Duty on Wii U. People won't buy a console just want to play Nintendo games," he said.
"People who bought Wiis are now playing FarmVille."
Indeed, despite not liking the free-to-play business model, Pachter is bullish on Zynga.
"I play all Zynga games. FarmVille was stupid. CityVille was better. CastleVille was brilliant."
He described social games as like casinos, in terms of the range of experiences on offer and the way people spend money.
"Social is the defacto entry point for games," Pachter.
C-c-c-changes
But coming back to monetisation, Pachter called multiplayer is the biggest threat to the games industry because it is crack.
"People only spend around 12c per hour on a multiplayer game like Call of Duty, while they pay 58c per hour to watch TV," he argues.
It's even worst for free-to-play games.
"My problem with free-to-play is that it's free," he stated. "No other entertainment medium gives its content away."
He predicted this would change with more adverts put within games and that there will be new monetisation models.
"I think free-to-play will go away, probably by 2020. If it's not ads, it will be something else."
And more widely, Patcher wasn't convinced there would be another generation of consoles, especially with the growth of tablets and streaming services.
Instead, he expected many games will move to a service model, with developers and publishers reducing the availability of free content with premium and elite services.
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Contributing Editor
A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.
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